Both parties have cited cases decided under Article 3, Section 3-403 of the Uniform Commercial Code (OCGA § 11-3-403). However, Article 3 applies only to negotiable instruments, Barton v. Scott Hudgens Realty, 136 Ga. App. 565, 566 ( 222 S.E.2d 126) (1975), and the contract at issue does not so qualify. The contract was not a negotiable instrument as defined in OCGA § 11-3-104 (1) because it was not "payable on demand or at a definite time," id. at (c), but was "payable only upon an act or event uncertain as to time of occurrence," OCGA § 11-3-109 (2) — i.e., when the work was performed. See Barton, supra.
Freezamatic involved a suit on two promissory notes, and the holding therein was based on the application of OCGA § 11-3-307, which applies only to negotiable instruments. See Henry v. Cobb Bank Trust Co., 151 Ga. App. 725 ( 261 S.E.2d 459) (1979), reversed on other grounds, Cobb Bank Trust Co. v. Henry, 246 Ga. 225 ( 271 S.E.2d 444) (1980); Barton v. Scott Hudgens Realty Mtg., 136 Ga. App. 565 ( 222 S.E.2d 126) (1975). The lease and guaranty agreements at issue in the present case clearly do not qualify as negotiable instruments, and the default judgment rendered against MTW clearly does not preclude the appellants, as sureties, from contesting the amount of the alleged deficiency or raising any other defenses which are not personal to MTW.
Appellee's reliance upon Freezamatic Corp. v. Brigadier Ind. Corp., 125 Ga. App. 767 ( 189 S.E.2d 108) (wherein it was held that under our UCC when execution of a promissory note is admitted but an affirmative defense is not raised, judgment on the pleadings in favor of the holder is proper), is misplaced. "While it is true that Code Ann. § 109A-3-307 (2) provides for such a circumstances [judgment on the pleadings where the pleadings show the plaintiff is a holder in due course, execution is admitted, and an affirmative defense is not pled] what the appellee ... overlooked is that the provisions of Code Ann. Ch. 109A-3 apply only to negotiable instruments and the `promissory note' here in issue [as we have held above] does not so qualify." Barton v. Scott Hudgens Realty c., Inc., 136 Ga. App. 565, 566 ( 222 S.E.2d 126). (Emphasis supplied.)
Exactly what time was intended, however, is impossible to ascertain from the face of the note. When a note is payable only at an indefinite time in the future, and parol evidence is required to supplement its terms, the note is not a negotiable instrument within the meaning of Article 3 of the Uniform Commercial Code. Barton v. Scott Hudgens Realty Mortgage, Inc., 136 Ga. App. 565, 222 S.E.2d 126 (1975); Williams v. Cooper, 504 S.W.2d 564 (Ct. of Civ.App. of Tex. 1973). U.C.C. § 3-304 provides that: "The purchaser of [a negotiable instrument] has notice of a claim or defense if . . . the instrument is so incomplete, bears such visible evidence of forgery or alteration, or is otherwise so irregular as to call into question its validity, terms or ownership or to create an ambiguity as to the party to pay . . ." Because this instrument is not negotiable, however, it is not necessary to reach the question whether its facial inadequacy put plaintiff on constructive notice of a claim or defense under § 3-304.
We assume without deciding that the condition precedent established by the second sentence of paragraph 23 was met as of September 5, 1979. For a discussion on: 1) the degree to which loan commitments are binding upon the lender; 2) how loan commitments affect real estate sales commissions or loan origination fees; and 3) the controlling nature of the contractual language, see, e.g., Dubin Weston, Inc. v. Louis Capano Sons, Inc., 394 F. Supp. 146, 154-55 (D.Del. 1975); Lowe v. Massachusetts Mutual Life Ins. Co., 54 Cal.App.3d 718, 723-26, 127 Cal.Rptr. 23, 25-26 (1976); Sorenson v. Connelly, 36 Colo. App. 168, 170-71, 536 P.2d 328, 330 (1975); Barton v. Scott Hudgens Realty Mortgage, Inc., 136 Ga. App. 565, 566-67, 222 S.E.2d 126, 127-28 (1975); Johnston v. State Bank, 195 N.W.2d 126, 127-29 (Iowa 1972); Bushmiller v. Schiller, 35 Md. App. 1, 2-10, 368 A.2d 1044, 1045-48 (1977); Leben v. Nassau Savings and Loan Ass'n., 40 A.D.2d 830, 830-31, 337 N.Y.S.2d 310, 311-12 (1972), aff'd, 34 N.Y.2d 671, 312 N.E.2d 180, 356 N.Y.S.2d 46 (1974). B. Second condition precedent failed.
Furthermore, a note payable upon the acceptance of a loan commitment is not payable at a definite time. See, e.g., Barton v. Scott Hudgens Realty, 136 Ga. App. 565, 222 S.E.2d 126 (1975). In Cartwright v. MBank Corpus Christi, N.A., 865 S.W.2d 546 (Tex. App. 1993), the court found that a provision in a note allowing the maker the option to extend the note for up to 4 years constituted a definite time.